The relish with which David Cameron announced that our whole way of life would be affected for years by impending cuts, and no one in the land would be exempt from the asperities about to be inflicted, suggested to many that he and his fellow cabinet-millionaires will probably weather the coming storm better than the rest of us.

Nick Clegg's pious assertion that cuts would be fair and compassionate was at odds with Cameron's gusto, which is familiar enough in Conservative rhetoric: Cameron confronting an overweening state, which will be shrunk so the private sector might flourish once more. When he said the effects of his policies would be felt for decades to come, he meant something more than a mere diminution of the structural deficit.

He admitted as much – it is a question of seeing what competences can be removed from government and outsourced to private interests.

While cutting back big government may appear a matter of severe practicality, the "values" to which Cameron claims to be returning have deep roots in an ideology from the early industrial era. For this is also a declaration of faith, a solemn renewal of Conservative vows.

It is apt that Conservatives should be in coalition with Liberals, for theirs is indeed a restatement of a truly liberal creed, at the heart of the multiple freedoms of which is the liberty for the poor to become as impoverished and deprived as they choose. It is a true homecoming.

Trust in the "self-regulating market", the light touch, the tolerance of extremes of wealth and poverty, which Labour disastrously sought to make its own, derived from an idea formulated in the 18th century, Adam Smith's invisible hand, which, it was believed, would ensure the wellbeing of all society, if only the self-interest of all economic actors were allowed to operate freely. This ideology evolved, with the industrialisation of Britain, into a conviction that the free market was actually an emanation of the natural world, and the laws of economics coincided with laws of nature.

That our worldly arrangements are consonant with the natural ordering of the universe has many advantages; not the least being that the authority of nature is self-evident and requires no elaboration in the realm of ideology. Its survival does not depend on any religious texts of revelation, or even secular scripture. Its strength lies in its vaporous quality; like an odourless but deadly gas, pervasive but impalpable.

In the early 19th century, this expressed itself as laissez-faire, faith that the market, if left alone, would heal and correct itself without human mediation, as though the economy were a primitive, self-purifying kind of Gaia. The "science" of economics has since then been conducted by qualified officiants in the rites of money, the shamans of an animistic wealth creation. This cult swiftly became orthodoxy; and has proved remarkably tenacious, despite the heroic efforts of Marx and others, to demolish and replace it with an altogether more dogmatic faith; the working out and exhaustion of which we have witnessed in our lifetime.

But the spectre of laissez-faire was never exorcised. It remains, the ideological ghost in the machine, to haunt the contemporary world. The right continues to yearn with insistent nostalgia for a free market, burdened only by minimal demands of government, defence and law and order. The greatest obstacle to this state of perfection is, of course, the poor, whose demands upon the state have always been seen as an encumbrance to its sublime mechanism.

"Pauperism" long ago took on the colour of culpability. The distinction between the idle and improvident poor and the "deserving" goes back at least to the Elizabethan poor law. It took on a new force in the early industrial era, which saw an unprecedented growth in pauperism. The enthusiasts of laissez-faire concluded that the evil was compounded by efforts to relieve it, and helping the poor only increased their number. Everything indicated that "natural" processes should be allowed to take their course.

Today's detestation of "big government" stems from this same source, and the affection of Cameron and his colleagues for the "big society" is a euphemism for the reduction of public funds in assisting the poor: rolling back the state, leaving the market to distribute its rewards in accordance with the natural order of things. Those who have rarely come closer to nature than on a golf course depend heavily for their ideological rationale upon an archaic natural imagery of haymaking and harvest, sowing and reaping, green shoots, nest eggs and fattened geese, seed-corn and pigs driven to market, ripeness and maturity, low-hanging fruit and fertile ground – words which, at one time, referred to something other than profit and loss, for which they are now metaphorical proxies. Indeed, big economic players now "make the weather"; are sometimes called "rainmakers".

In this version of the world, the market mechanism is as flawless a creation as the earth, and should remain untouched by the hand of meddlers, whose only effect is to upset its power to enrich us all. It is remarkable that the establishment of laissez-faire itself in the early 19th century required an enormous amount of government intervention and regulation, not least of which was the vast bureaucratic control necessary to administer the harshly punitive Poor Law Amendment Act of 1834.

Whatever the real extent of the "structural deficit", the Conservatives, true to their faith in the economy-as-nature, have a powerful urge to wield the axe to dead wood; as they do so, they are bound to exaggerate the pruning required to cut back the luxuriant growth of Labour's state.

An indolent fantasy of capitalism as field, farmhouse and flowering earth suffuses the thinking of bankers, financiers, politicians and their academic backers. This is why, even now, bankers blackmail society with the threat that, if the extravagant rewards are curtailed, they will be off to "greener pastures", adhering to the last to the bucolic imagery of their calling.

Once more, the state shrinkers, the advocates of vanishing government, the cutters of red tape and regulation, the liberators of a humanity constricted by statist straitjackets, believe they have a mandate for freedom. But it is freedom under the law of an imagined jungle; by a savage irony, at a time when the smoke from the stumps of felled trees in the real jungle darken the horizon of a used-up future.